ChApter 6 | YOUR PROFIT AND LOSS FORECAST | 113
marketing, or selling to friends and
acquaintances, has become an identified
alternative to more traditional selling
strategies. Guerrilla marketing involves
getting the word out to the people
and groups who are most apt to need
your goods or services, rather than
advertising your product or service to
the community as a whole. “Guerrilla”
refers to the use of unconventional
methods to spread product or service
information. For example, guerrilla
marketers may pay students or part-time
workers to hang out in bars or coffee
houses and talk about their product in a
favorable way.
If you get creative, there are all sorts
of ways you can reach the people most
likely to want your product or service,
for little or no cost. For example, if you
invent a better software program (or
develop a consulting business in your
special field), you could advertise on the
radio—or you could target your market
by finding a computer bulletin board of
people who need your product. Your
next step might be to get someone to
write about your business for a computer
magazine or newsletter. Similar
opportunities exist in every business.
If you open an oboe repair shop, for
example, one of the first jobs is to
figure out inexpensive ways to let every
oboist within a hundred-mile radius
know of your existence. One way might
be to contact every wind instrument
instructor, school band leader, and musicstore in the area and supply them with
free literature on oboe cleaning.
Many successful businesses allow a set
percentage of gross sales for promotion,
often 3% to 5% of sales revenue as a
budget figure. They allocate half that
amount for a continuing, low-level effort
to let people know about their product
or service and schedule the other half to
advertise sales and special events.
Think about what you will need to
do to tell people about your business.
Will your business need cards? Flyers?
Newspaper ads? A good-sized ad in the
yellow pages? Sample merchandise sent
to media outlets so they can review your
product? Window displays? Mailings?
A part-time marketing expert to help
you pull this together? Avoid expensive
promotions that you haven’t tried before.
For example, if you get an idea that
involves mailing out 100 ,000 flyers,
plan for a test by mailing only 5,000. If
it works, go for the rest. If not, use the
money you saved for something else.
A great deal of money spent on
conventional advertising is wasted.
New businesses especially are prone to
spend too much in the wrong places.
So use your common sense. Talk with
friends in business. Check with trade
associations to see what they suggest
as a good budget number for telling
potential customers about your business.
Once you’ve set a budget for special
promotions and continuing low-level
advertising, write both amounts in the
Profit and Loss Forecast.